Leaky home claimants can seek general damages

Building and Construction Minister Clayton Cosgrove says that leaky homes claimants can now be certain that the Weathertight Homes Tribunal and WHRS adjudicators are able to award general damages, including those for mental distress or anxiety.

The Weathertight Homes Resolution Services (Remedies) Amendment Bill was passed through Parliament last night. The Bill, which amends the Weathertight Homes Resolution Services Act (WHRS) 2006, was introduced to the House on 22 May 2007.

Mr Cosgrove said the Bill clears up any future problems that could have arisen as a result of a recent High Court decision (29 March 2007) that held general damages could not be awarded as compensation for any mental anxiety or stress under the legislation.

He said the Government moved quickly to rectify the situation, given that the judgment set a precedent that could have impacted on existing adjudications started under the WHRS Act 2002, and the administration of the WHRS Act 2006.

“It has always been the Government’s intention that the WHRS legislation offer a ‘one stop shop’ dispute resolution process that functions as an alternative to the court, and where claims could include general damages,” he says. “The effects of the judgment were contrary to this aim so the Government has fast tracked this Bill, so that confidence about the resolution process could be restored to claimants.

“To date, some 21 per cent of WHRS settlements have included general damages, and two previous District Court appeal decisions also interpreted the WHRS Act 2002 as 'including' such powers to claim general damages, so this High Court decision went against existing case and legal precedence.”

Mr Cosgrove thanked the Social Services Select Committee for its rapid work on the Bill, and stakeholders who provided valuable guidance and assistance.

“I would like to thank John Gray of the Leaky Homes Action Group and individual home owners for their strong support for this amendment. I am especially pleased the New Zealand Law Society also agreed that the amendment was necessary and I appreciate its helpful contribution and guidance.

“Claimants value the awarding of general damages as an acknowledgement of the stress they have suffered. This change is great for WHRS claimants because being able to claim compensation for mental anxiety or distress is an important principle of justice for them.”